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tv   Nightly Business Report  PBS  June 6, 2017 5:00pm-5:31pm PDT

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>> announcer: this is "nightly business report" with tyler mathisen and flashing yellow. investors appear cautious but business leaders are the most confident they've been in years about the direction of the u.s. economy. gold rush. the precious metal hits its highest level in months. but does it belong in your portfolio? big deal. amazon is offering a discount to some and it's taking on walmart in the process. that's on "nightly business report" tonight, tuesday, june 6th. hall lower everyone, i'm sue herera. >> i'm bill griffeth in for tyler mathisen. investors seem to have struck a cautious tone as they await the
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testimony of former fbi director james comey, the upcoming election in the and yunited kin and next week's stock numbers. investors bought bonds, and gold prices hit their highest level in months. first, the dow jones industrials fell by 47 points, closing at 21,136. nasdaq was down 20. s&p 500 dropped by six. while investors are not making any big moves, business leaders are optimistic. ceos are more confident than they've been in years. kayla ten o'cloausche has more. >> reporter: each quarter, the ceo roundtable's survey showed a
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reading after a big jump in march. on capital spending, they expected small increases. the plans for u.s. hiring in the next six months actually dropped. as did the outlook for this year's gdp growth. now ceos expect 2.0% gdp for 2017, down 2%. josh bolton, former chief of staff for george w. bush, said that optimism is based on potential tax reform. u.s. businesses remain optimistic, he says, but there is also a potential downside from failure. that should add to the urgency with which they pursue the reforms. the survey took place between may 3rd and 24th, three weeks when the house passed its health care bill and the president fired then-fbi director james comey. corporate america has made it clear it's optimistic but
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conditionally so. for "nightly business report," i'm kayla tausche in washington. there are more job openings in the u.s. than ever before. according to the labor department, a record 6 million positions were posted at the end of april. hiring, however, decreased. and that gap between job openings and hiring may suggest employers are having trouble finding qualified applicants. it may be one of the hottest housing markets in history. a new report shows a nearly 7% rise in home values versus april a year ago. but that 7% is down slightly from the prior month's annual gains and may indicate that homes are getting too expensive and unaffordable for prospective buyers. forecasts were lowered for annual gains by 5%. the stock market has been up quite a bit this year dow jones industrial average gained 7%
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just since january. but not all 30 stocks in that index are enjoying this rally. dominic chu looks at what's driving it and what's not. >> reporter: the dow jones industrial average gained close to 1400 points so far in 2017. powering the dow has been a pretty narrow range of stocks. eight stocks in the dow have been responsible for just about every point in those gains so far. and three of those stocks are responsible for half of them. so when it comes to the dow, which stocks are the ones driving the gains and which ones are the biggest drags on it? we put up our thermometer to give you a sense of what's powering the dow. apple's stock has been on a tear so far this year. as a result, and because of its price weighted index, it's added 263 points overall. boeing a bigger point contributor, 225 points comes from boeing. then 207 from mocdonald's.
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those three stocks responsible for half the overall point gains so far this year. after the biggest drags, you've got ibm, big blue, taking 93 points off the overall index's value year to date so far. chevron, about 98 points. and the biggest drag so far has been on the financial side of things, perhaps no surprise there, goldman sachs dragging about 167 points off, as financials have lagged so far in trading this year. as we talk about the dow, fairly narrow range of stocks powering the gains there, much like the s&p 500 where the top five stocks in there, like apple, like alphabet, like microsoft, like amazon and facebook, are powering many of the gains there. these few stocks are the ones driving the gains for the dow so far this year. the question is whether that becomes a detriment in the future. we would like to see larger participation for that bull market. i'm dominic chu for "nightly business report." as stocks have rallied, so has the price of gold, often
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viewed as a safe hastven. this year gold is closing in on $1300 an ounces. a new report suggests that adding alternative investments to a traditional portfolio of stocks and bonds has historically increased returns. so should investors consider adding some gold to their holdings? here for a strategy session is brad macmillan, chief investment officer at commonwealth financial network. thanks for being here. >> thank you for having me. >> as we mentioned, gold has had quite a run. tell us how you feel about gold overall. >> i think gold does deserve to be part of your portfolio longer term. but the question is not should it be there. yes, it should. the question is, if you're not into it right now, should you add it now. and i think the answer is probably not. >> you want to wait to see, get back to the old high, is that the idea? let it prove itself, if it's going much higher from here, it
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would need to exceed that previous high? >> not necessarily the all-time high, but what we know is over the past several years gold has typically stalled out at 1300, $1350. we're getting to the point where it stalled before. >> so if it breaks through that level where it stalled before, you would go in? and if so, how would you do it, for the average investors, what type of vehicle would you use to own gold? >> for the average investor, it doesn't make sense to own bouillon or coins. the best way to invest, two of the etfs that hold gold, one is gld, the other is iau. they're both actually good ways to get exposure to that without the costs and risks of holding the physical metal. >> i've been asking for the last few years here what makes gold move. do you view it as the traditional inflation hedge, or
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has it become a risk asset to some degree here? >> i see gold as insurance. i see gold as something that goes up when everything else goes down. if you look at the data, it's actually not an inflation hedge, although people do see it that way. and that seems to be part of what's driving it. but when concerns rise, gold is want place to be. and that's actually what makes it a good part of a portfolio. >> brad, thank you very much. brad macmillan with commonwealth financial network. still ahead, does hope float? why the troubled oil tanker industry is betting on it.
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the u.s. and mexican governments have reached a new agreement in principle on trading in sugar. the deal was announced by commerce secretary ross and it calls for mexico to export a smaller portion of refined sugar and a larger proportion of raw sugar to the u.s. u.s. producers have not endorsed the agreement and in a statement, they expressed concern that the deal contains a major loophole. the companies that transport crude around the world are hitting some rough seas. tanker industry profits are getting squeezed as a result of good old supply and demand. and as morgan brennan tells us, it's not clear when the tide might turn. >> reporter: this is the largest oil tanker ever to call on a gulf of mexico port. it did so recently in texas. a test by occidental petroleum to see if the shale producer can more directly load its crude onto ships destined for asia.
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this comes at a time when oil shippers are destined for new markets. it's treaded water amid opec cuts. at the same time, dozens of new tankers ordered years ago during the oil glut are now being delivered. >> the reason for the market challenges is mainly on the supply side, meaning there's too many ships relative to the amount, the number of cargoses, the number of oil cargos in the market. >> reporter: fleet operators are feeling some pain. >> if you look at the vlcs, the largest ships, the bellwether of the market that everybody focuses on, i think that market averaged in the 50, $60,000 a day range in 2015. at the moment we're looking at the market in the high teens, low 20s. so it's definitely a quite significant downturn. >> reporter: tanker stocks have tanked this year.
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analysts say consolidation would create more discipline for supply and capacity. the deals have already begun. ck tankers is merging with tanker investments. meantime, crude exports from the u.s. have doubled to more than 1 billion barrels a day. more is heading to asia. meaning once the infrastructure is there, more super tankers like this may soon call to ports in the u.s., creating a new bright spot for the struggling sector. for "nightly business report," i'm morgan brennan. sales flat lined at arts and crafts retailer michael's. that's where we begin our market focus. the company spent less in the latest quarter, resulting in revenue roughly the same as a year ago, and missed expectations. profits came up short, with michael's adding that same store sales would be lower in 2017 due to a weakened canadian dollar.
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shares fell to $18.16. macy's warned its profit margins are tightening and will be weaker than originally forecast. the company reaffirmed its full year revenue and earnings outlook but investors did not care about that. they sent shares down about 8% today to $21.90. g3 apparel group posted a smaller than expected loss and said it expects to return to profitability this year. the parent company of brands such as donna karan saw demand rise. g3 raised its sales outlook for 2017 and the shares soared by 15% to $22.92. speaking of apparel, the clothing retailer land's end says its loss widened as overall sales edged lower. those results were weaker than what analysts were expecting. nonetheless, the company said there were some bright spots in the latest quarter, including higher same store sales. land's end also said it focused
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on several initiatives that it hopes will drive its future performance. the shares were off 10% to $14.95. general motors shareholders rejected a proposal by investor and hedge fund green light capital to split the automaker's stock into two classes, one offering dividends, the other benefiting from earnings growth. ceo mary berra spoke about green light's plan. >> we value the voice of all our shareholders. but as we looked at the aspects of this particular proposal, we thought it provided several elements of risks and was not in the best interests of our shareholders. it wasn't one thing. it was doing a careful and thorough objective analysis. >> the shares fell to $34.43. restaurant and gaming chain dave and busters reported revenue that grew and topped estimates. the company raised full year forecast. investors seemed to focus only on same store sales. they grew but not enough to beat
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expectations. shares fell in after-hours trading but finished the regular session up nearly 3% to $70.17. the ceo of j. crew is stepping down. mickey drexler will be replaced in july but will remain as chairman. he is known for the turnaround of the gap in the 1990s. at j. crew he introduced the idea of providing design quality clothing for the masses. but the retailer has hit a sales slumpi slump like other apparel brands. a new front in the battle between the world's largest traditional retailer and the world's e-commerce juggernaut. amazon is offering a discount on prime membership for people with low incomes and who receive government assistance. those consumers can pay $5.95 per month for a prime membership which typically costs $10 monthly.
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the discounted rate will be available to nearly 20% of the u.s. population. it's a segment of the market that walmart has long dominated. last year alone, nearly one out of every $5 spent using the assistance program was spent at walmart. is amazon's discount prime membership for low income shoppers on government assistance a good idea? or not? we have both sides of that debate right now. derek thompson is senior editor at "the atlantic." he says it is. while joe rideout, a spokesperson for a consumer advocacy group, disagrees. joe, you feel this discount won't serve the targeted audience. why? >> to begin with, i think it's just too much money for someone who is struggling to put food on their table without assistance, to expend another $72 a year to sign up for this service. it's something of a discount from $110 a year and kudos to amazon for trying to come up with ways to reach out to new
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groups. i just don't think thermal makes that much of a difference, particularly when it comes to getting groceries. >> derek, you think it does make a difference? >> sure. they have 50% discount on their products, a lot of companies don't offer discounts to people just because they're on snap or on food stamps. nobody is forcing these families to buy prime memberships. i have some friends who have prime memberships, others don't. it's good for a company, even if this is pro profit, even if it helps them in the long run, it's good for the company to recognize that engine inequality is a part of this country's picture. >> what about to joe's point that this could be tempting for people in the lower income bracket, now some of these products are available to them with that easy shipping that amazon offers. >> sure. there's nothing evil about easy shipping. there's nothing evil about buying anything from amazon. you know, pizza is tempting.
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food is tempting. candy is tempting. but i don't think there should be moralists who say people on low income, who are on snap, shouldn't by potato ships or pizza or candy. we should have government programs that help people with low incomes to have more income. once we transfer that money to households, we should allow them to spend money on what they value. if they value toilet paper, they can buy it on amazon. if they want food, food on amazon. this doesn't necessarily put money in people's pockets, but it's a discount for people with low income. that's a good thing. >> joe, perhaps there is worry that amazon may be exploiting the fact that these are lower income people, that are trying very hard to put food on the table, and at lower prices certainly with the prime. but tell me how you feel about the points that derek just made. >> well, to derek's point, i will certainly agree that more
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competition is good for consumers. here is another option for them. the problem is it's a bad option. it's not going to save low income consumers any money. once the government distributes benefits, it's someone's option to spend it as long as they see fit as long as it's a qualifying purchase, let's look at what amazon does. you can't use food stamps to buy amazon food in 47 out of 50 states. if they want to help low income americans struggling financially, they could start right there and allow all americans to use their food stamps to buy food. and to add on to the $72, i really should point out for anybody who thinks that we're going to be helping low income americans in food deserts with this prime reduced rate, to get amazon grocery delivery you have to sign up to another service called amazon fresh. that makes the total bill $250 a year. the math just doesn't work out for somebody who is financially struggling. >> joe, amazon is clearly going after walmart with this strategy. let's face it, walmart has made
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a mint off these low-income people with these low everyday prices. >> that's true. when you get into government benefits, i think there's a real case to be made about how walmart has profited from all of us in how they pay their workers so little that they have to essentially game the system in order to make enough money to feed their families and to survive. really we are subsidizing this corporate giant's profitability to a degree. it's certainly about time somebody challenged them. i certainly don't see how this is going to help individual people. >> derek, you get the last word. does amazon have to -- does, rather, walmart have to answer to amazon's move or not? >> the big picture is this. amazon is trying to become walmart faster than walmart can become amazon. amazon is trying to build products for low income households faster than walmart can build e-commerce offshoots
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of its company. they're competing against each other and that's good. i agree with joe's final point. i think we're dealing with two extremely separate issues, government policy and corporate policy. government policy, we should have transfers to low income to help them pay their bills and buy food. but on corporate policy, it is good, it is good for companies to offer lower income families a discount so they can buy certain products if they so choose. i can't think of a good argument against a company doing so. >> very good discussion, gentlemen. derek thompson from "the atlantic," joe rideout from consumer action. thank you both. >> thank you. coming up, smart medicine. meet the startup that helps patients take their meds.
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uber has reportedly fired 20 employees. this follows a company investigation into sexual harassment claims at the ride hailing company. they told their staff they will expand their unit to investigate claims and plans to increase management training. anthem plans to exit most of the ohio obamacare market next year. the health insurer says its decision is due to the uncertainty over whether the government will continue to provide subsidies aimed at making those plans affordable. republicans are trying to cut off the payments in court proceedings, and the president has made conflicting comments about whether the government should in fact continue paying them. anthem is of course one of the largest sell he recalers of ind plans on those health exchanges. seattle has become the latest city to tax sugary
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drinks. the measure, passed late yesterday, will go into effect in january. the new tax is expected to generate $15 million in revenue a year. the low waw was opposed by the h industry which said the tax would hit working class families and small businesses the hardest. businesses are gathering in new york for the iconic conference presented by inc. magazine and cnbc. kate rogers spoke to one businessman who is rethinking the way we take our medicine. >> reporter: one of the biggest challenges for health care providers today is getting patients to actually take their medication. this company is out to change that. >> we make patented smart pill bottles that track medication adherence in realtime. >> reporter: the bottles are loaded with technology,
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including sensors that measure the open and closing of the bottle. if a dose is missed, the bottles light up and chime to remind patients to take their pills. the technology can also prompt reminder phone calls, text messages, or even activate doctor interventions. you don't have to be tech savvy to use them. >> our average user is 70. a third don't even own cellphones. >> reporter: they partner with pharmacies and hospitals to provide the smart bottles to patients for free, distributed from some of the largest pharmacies across the globe. >> it puts them on a schedule. so patients have changed their behavior in response to having the bottle. >> reporter: to date they've raised $2.4 million in funding from investors including ge ventures and thousands of bottles on the market in four continents. streaming patient data back to providers in realt they're continuing to expand in the u.s. and internationally.
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the startup said it's already profitable. for "nightly business report," i'm kate rogers in new york city. >> i can think of lots of people that would benefit. you're looking two of them right here. >> exactly. this is the time of year your public television station seeks your support. >> thank you for your support. have a great evening. we'll see you to.
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>> this is bbc "world news america." >> funding of this presentation is made possible by the freeman foundation and kovler foundation, pursuing solutions for america's neglected needs. >> planning a vacation escape that is relaxing, inviting, and exciting is a lot easier than you think. you can find it here in aruba. families, couples, and friends can all find their escape on the island with warm sunny days, cooling trade winds,nd

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